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TMI Blog2001 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... orked out on the basis of the cost of construction incurred by the assessee. But the Assessing Officer found that the completed portion of the building was let out by the assessee and the assessee had disclosed the receipt of rent for the shop rooms at Rs. 38,794. In addition to the shop rooms the assessee had also let out a hall in the building complex for a sum of Rs. 10,000 per annum. Therefore, the Assessing Officer held the view that the let out portion of the building had to be taken as completed and the valuation of the property need to be made on the basis of rent capitalisation method. For that purpose the Assessing Officer adopted the rental value of the shop rooms at Rs. 38,794 per month as disclosed by the assessee and adopted Rs. 1,000 per month as the rent relating to the hall let out by the assessee. Altogether the monthly rent was worked out to Rs. 39,794 and on that basis adopting a multiplier of 12.5 times, the market value of the shopping complex was worked out to Rs. 46,23,275. 3. The detailed computation of valuation is reproduced from the assessment order for an easy understanding of the issue: "The assessee is the owner of a multi-storeyed shop complex at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; -------------------- Annual letting value Rs. 39,794 X 12 = Rs. 4,77,528 Less: Municipal tax as per 1990-91 asstt. year Rs. 36,037 Repairs @ 15% of the annual letting value Rs. 71,629 Rs. 1,07,666 ------------ --------------- Net maintainable rent Rs. 3,69,862 Market value @ 12.5 times. &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this assessment as the assessment in question is in respect of the value as on 31-3-1989. 5. The CWT(A) has failed to see that the amount accounted under building construction in the accounts for the financial year 1989-90 (viz., Rs. 35,000 was for alteration of the already completed portion at the direction of the tenant, viz., United India Assurance Co. 6. Even if it is accepted for argument sake that the building was incomplete as on 31-3-1989, he has erred in rejecting the value of the building fixed on the basis of the report of the Distt. Valuation Officer, who has followed the rates prescribed by the CBDT in Instn. No. 1671 for tax valuation. 7. The CWT(A) has erred in arbitrarily fixing the fair market value of the property with a nominal addition of 20% of the admitted cost of land especially when the working of the Distt. Valuation Officer is based on recognised principles of valuation. 8. The CWT(A) has erred in not considering the quantum of deduction allowed in the appeal filed by the CIT(A) by way of self supervision while disposing the IT appeal for the assessment year 1988-89, as the same also goes to enhance the market value of the property even though no inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire construction of the assessee's commercial complex was not complete as on the valuation date. But at the same time construction of a substantial portion of the complex was completed on the valuation date and that part of the building has become fully functional. It is on that basis the assessee has let out shop rooms as well as hall for rent. The assessee himself has declared a receipt of monthly rent of Rs. 38,794 for the shop rooms and an annual rent of Rs. 10,000 for the hall. Therefore, one need not be carried away by the fervent argument of the assessee that his building was incomplete as on the valuation date. The assessee was constructing a huge commercial complex with independent functional units therein. A major portion of that building consisting of shop rooms and a hall were complete and were let out to different tenants. The assessee was receiving rent out of that. Therefore, it is not proper for the assessee to argue that his building as such was incomplete as on the valuation date. The correct position is that a major part of the assessee's building was completely constructed and have become functional and the residual portion was remaining to be completed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent. No part of that property was complete as on the valuation date. No part of that property had become functional on the valuation date. The property as a whole was under construction. It is in such circumstances the Hon'ble Court has held that such an incomplete property would not be having a market value and therefore such property has to be valued on the basis of the investment made by the assessee as on the valuation date. In the present case, the facts are entirely different, as already considered by us in this order. A major portion of the construction has been completed. That part of the commercial complex has become functional and shop rooms and halls pertaining to that portion of the complex have already been let out for rent. The assessee is receiving rental income. In such circumstances, it cannot be construed that the commercial complex owned by the assessee was remaining as an incomplete structure throughout and as a whole in a layman's language, the shopping complex constructed by the assessee was partly complete and partly incomplete. This proposition is not out of place and not against law in the present day circumstances of business and investments. Now-a-days ..... X X X X Extracts X X X X X X X X Extracts X X X X
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